Mumbai-based KKR, a leading global investment firm, has introduced Alliance Tire Group (ATG) into the Green Portfolio Program (GPP), an operational improvement program that uses an environmental lens to assess critical business activities of KKR’s participating private equity portfolio companies.
ATG is a global tire maker that specializes in producing off-highway tires and caters primarily to the agricultural, forestry and construction industries.
ATG’s entrance into the GPP enhances its existing sustainability efforts which have been an area of focus since ATG’s inception. These initiatives center on reducing energy consumption, minimizing scrap waste and environmental impact at its tire manufacturing facilities in India and Israel. The factories in India have been built to high environmental standards, with zero liquid discharge and rainwater harvesting. ATG’s facilities in India and Israel have already received or are in the process of obtaining ISO 140001 environmental management systems certifications.
Since August 2013, ATG’s management worked with KKR and members of KKR Capstone, an independent team of operational executives who work exclusively with KKR portfolio companies, to measure its coal consumption energy usage and its scrap losses.
The program has already led to quantifiable environmental results. Between the second quarter of 2014 and the first quarter of 2015, ATG’s calculations have shown:
• Coal consumption per ton of production has been reduced by ~90 kg/ton;
• Steam consumption has been reduced by 10 per cent per ton; and
• Scrap waste has been reduced by 4.3 per cent.
ATG expects the collective environmental savings from the gas project alone to equate to US$450,000 of annualized cost savings at ATG’s Israeli plant. ATG will continue to calculate the financial return on its other initiatives and will report the results next year.
“ATG’s core principles include being mindful of our environmental impacts. For example, waste-reduction has been a long-term goal for our business. KKR’s assistance in introducing new metrics and analytics to our initiatives helps us measure and improve upon our sustainability performance,” said Yogesh Mahansaria, Founder & CEO of ATG.
“We believe ATG is world-class in terms of its environmental sustainability efforts. We are thrilled that KKR and KKR Capstone could contribute analytical tools to complement ATG’s ongoing sustainability efforts. The ability to measure environmental impact while producing tangible cost savings highlights is the foundation of the Green Portfolio Program,” said Sanjay Nayar, Member & CEO of KKR India.
The GPP, which began in 2008 as a partnership between KKR and the environmental non-profit organization Environmental Defense Fund (EDF), applies KKR’s approach of assessing, measuring, and optimizing performance in order to help portfolio companies manage their environmental impacts while also improving their bottom line. KKR works with members of participating private equity portfolio companies to enhance existing sustainability initiatives by providing a set of analytic tools to help company management teams assess and track improvements across several key performance areas, such as greenhouse gas emissions, water, waste, priority chemicals, and forest resources while adding to the company’s bottom line.
As of October 2014, 21 private equity portfolio companies worldwide participating in the GPP reported achieving nearly US$1.2 billion in avoided costs and added revenue. The companies reported having avoided more than 2.3 million metric tons of greenhouse gas emissions between 2008 and 2013, equivalent to powering 217,000 homes; avoided 27 million cubic meters of water use, enough water to fill nearly 11,000 Olympic-sized swimming pools; and avoided 6.3 million tons of waste while also recycling more than 1.6 million tons, enough to fill approximately 450,000 garbage trucks.
KKR is a leading global investment firm that manages investments across multiple asset classes including private equity, energy, infrastructure, real estate, credit and hedge funds.
ATG serves customers in 120 countries, across 6 continents.
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